A combination of the strong kiwi + ongoing troubles in Europe, NZ's 2nd biggest export market indicate the central bank will be forced to cut rates soon. Exhibit 1 to 4: The RBNZ’s trade weighted index at a fresh 3 mth high, EUR/NZD at all time lows, plunging NZ farmer confidence & the ASB Bank investor confidence index's decline to a 3-yr low. As events keep driving Europe & NZD in opposite directions, look for the rates markets to magnify bets of a 25bps cut on Sept 13 (now at a slim 17% probability) & for the RBNZ to cut them at a subsequent meeting on Oct. 25
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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Any opinions, news, research, analyses, prices or other information contained on this story, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
